A war between Arm Holdings and its former head in China could bring the $ 40 billion deal between NVIDIA (NASDAQ: NVDA) and SoftBank (OTC: SFTB.Y), according to a report in Financial Times. Tensions increased between former Arm China chief executive Allen Wu – who controls 17% of the company’s shares – and the board of directors went out of control, causing the deal to be questioned.
Earlier this year, Arm China ‘s board of directors voted to get rid of Wu, accusing him of having multiple conflicts of interest over his investment fund Alphatecture. Wu has since taken control of the company̵7;s operations in China and continues to act as the legal representative, as well as managing the segment’s day-to-day operations.
His attempt to get rid of Wu proved problematic, as his well-chosen security team refused to acknowledge the Arm China board or its representatives. According to the report, emails from Arm executives in the UK to employees in China are also being blocked by the filtering software.
Two companies in China, both controlled by Wu, have filed a lawsuit for the wrong termination of the contract. Late last year, Wu took control of an investment firm that owned a significant stake in the company and now controls four of Arm China ‘s six major shareholders.
Eric Chen, who runs SoftBank’s operations in China, has been appointed as the middle man to negotiate a settlement with Wu, who recently said his departure from Arm China was “not a sure thing. Definitely, “this suggests that discussions can drag on.
Due to the deadlock, neither NVIDIA nor SoftBank have released any recent legal filings regarding the deal, as they cannot control the volatility.